Saturday, December 22, 2012


The exam might want to split hairs with you on the difference between GDP and GNP (Gross National Product). Gross National Product for the U.S. would count the production of U.S. workers stationed here as well as working overseas for American companies. Gross Domestic Product counts what is produced domestically, by both U.S. workers and foreigners working here in the United States (even for foreign-owned companies like Toyota and Mitsubishi). So, GNP tells us how much American workers are producing, wherever they’re stationed, while GDP tells us what is produced here in America, whoever is doing that work. Get Solid Series 65 Sample Questions

Tuesday, November 27, 2012

Common Mistakes Made by Series 65 and 66 Candidates

With few exceptions, the following ERRONEOUS notions are held by people heading to the exam center:

  1. Everything is covered by the Uniform Securities Act's anti-fraud statute
  2. Agents can not use the word "guaranteed"
  3. As long as they have no more than 5 clients, the RIA or IAR are exempt from registration
  4. Investment advice has to be on specific securities to count as "investment advice"
  5. The word "fee" = investment adviser or IAR; the word "commission' = broker-dealer or agent
Let's take them one at a time. Number 1--the investment has to meet the definition of a "security" to be subject to anything under a securities act, right? Whole life insurance and fixed annuities are not securities and, therefore, not covered by the Uniform Securities Act. Period. Number 2--broker-dealers can't guarantee investors against a loss; however, all US Treasury securities and a small handful of corporate bonds are guaranteed. The agent simply has to explain what the "guarantees" do and do not involve. US Treasury securities are guaranteed as to interest and principal by the US Treasury. A guaranteed corporate bond or preferred stock has a third party promising to make up any payments the issuer cannot make. Number 3--the much more important fact is whether they have a physical presence/place of business in the state. If they do, they register, regardless of the number or type of clients they serve. Number 4--the advice can be extremely general in nature, but if it is specific to the client to whom it is given, then it becomes investment advice. If a sports agent tells his client to put 1/3 into real estate, 1/3 into insurance products, and 1/3 into securities, that is investment advice. It involves securities and it's specific to the client. Number 5--the question is, "How are they functioning?" Are they compensated to tell people to buy or sell securities? If so, they're functioning like an investment adviser, even if they only earn commissions when clients buy the products in the financial plan delivered for "free." You hold yourself out as a financial planner, the regulators take your word for it. On the other side, agents earn 12b-1 fees, and these fees are a % of assets, yet these things are still just commissions or "asset-based sales charges." If the agent is getting compensated to sell securities, he's not acting as an investment adviser.Need Help with your Series 65?

Wednesday, October 17, 2012

Same Thing Only Different

Just finished a morning tutoring session and noticed that the client had some trouble recognizing when a different question was asking the same thing as a previous question he had already nailed. Most people get this first question wrong, but today's tutoring client nailed it in about 10 seconds:

An investor purchased shares of a growth & income fund in early February this year.  In late December this year, she receives a capital gains distribution from the fund.  Therefore
a.this represents a tax-free return of capital
b.the capital gain is tax-exempt to the investor
c.the capital gain is treated as a short-term capital gain
d.the capital gain is taxable at long-term capital gains rates

So, since he nailed that one, I assumed he'd also get this one right:

Which of the following represents an accurate statement concerning the tax implications of mutual fund investing?
a.municipal bond mutual funds distribute tax-free long-term capital gains gains distributions are determined by the fund's holding period, even if the investor has held the shares for less than one year
c.because the mutual fund provides a 1099 form, the investor is relieved of the responsibility to report dividend income to the IRS
d. all dividends distributed are currently taxed at a maximum of 15%

Notice how answer choice b is explaining exactly why the client got the first question correct? In the first question, the cap gains distribution was long-term because it was based on the fund's holding period--not the investor's. Why then didn't answer choice b scream out to the candidate?
Not sure. He knew answer a was wrong. He knew C was BS. But, still, he couldn't choose answer b here.
Maybe he was tired. But, at the testing center I'm hoping he will keep struggling with a question until he sees it in its proper light. For a lot of you, that isn't happening yet because you're only spending 15 seconds on a question. You want to know the answer without figuring out the question. That doesn't work, people. Be willing to figure out the questions, and you will end up getting licensed. HelpWithSeries65Exam

Friday, October 12, 2012

Series 65 or Series 66 Practice Question

There are many ways to ask a test question. To make sure you've studied the Uniform Prudent Investor Act, the test can ask you which of the following is or is not actually part of that document. Or, they can see how you APPLY the information you were supposed to have gotten from the UPIA. Maybe they throw something like this at you:

A large estate has hired you, an Investment Adviser Representative, to manage the account. Upon review of the assets, you find that 10% of the account is devoted to long-term investment-grade corporate bonds and 90% to a common stock issue that has appreciated 48% the past few months. What should you do according to the principles of the Uniform Prudent Investor Act?
A. nothing, as an estate account is generally closed within 6 months
B. sell the stock, as it is considered imprudent to hold such a large % of a fiduciary account in common stock
C. you may either sell or hold the stock, depending on which seems the more prudent action
D. you should probably sell the stock, as capital gains in this case can be minimized or avoided

Ouch. I know exactly what the question is getting at here, and even though I wrote it, I'm not 100% sure what the right answer is. Seriously. I like "D" here, even though C seems like a darned good answer, too. Generally, a prudent investor should diversify, except when he determines it's more prudent not to. But, the best reason not to diversify would be that he doesn't want to generate a bunch of capital gains. Fine, but this is an estate account--the cost basis is whatever the stock traded for on the date of death, and it's a long-term capital gain, assuming the estate sells it for more than it was trading on the date of death. In fact, an estate can just sell the stock 6 months after the date of death and use the value that day as the cost basis--no capital gains. So, in general, I like Answer Choice C, but since the question says it's an estate account, and since that clearly makes a difference, I go with Answer Choice D. Series 65 Help

What Kind of Questions Are on the Series 65 or Series 66?

Are you comfortable with a question like this?

The definition of "expected return" would relate to which of the following?
A. Sharpe ratio
C. Beta
D. Term life insurance

Okay, step one--what kind of return does one expect from a life insurance policy that has NO CASH VALUE?
None--eliminate Answer Choice D just because it's kind of smart alecky and sticks out like a sore thumb. Okay, Beta doesn't really try to predict, and isn't a "return" measurement. It just tracks the movement of one part of the index with the overall index--is MSFT more volatile or less volatile than the overall index it belongs to? About even, as it turns out, which is not the point--the point is, eliminate Answer Choice C. Excellent, now you're sitting 50-50. Unfortunately, this is where many of my tutoring clients blow it. They're tired now, cranky. They don't LIKE the Series 65 or Series 66. Uh-huh. I didn't like reading all the new crap from Dodd-Frank, but it seemed to be part of my job description, so let's stop wasting time here and get the job done. What is the Sharpe ratio? It's a risk-ADJUSTED return measurement. It measures the return that's already happened, adjusting it for the risk encountered. It can't possibly be predicting an EXPECTED return, right? So, even if you can't recall the definition of  CAPM (which is kind of lame, actually, but who cares), you simply eliminate Answer Choice A, and you win. CAPM measures expected return in a very interesting way--google the formula for extra credit. Need Series 65 Questions? Series 66?

Monday, October 1, 2012

What is a Brady Bond?

Some of you might see a question about Brady bonds, so let's cover it quickly here. First, these bonds are issued by developing/emerging market governments. Second, they are payable in US dollars. Third, they are often collateralized by US Treasury securities. Fourth, most issuers are Latin American nations. Finally, although these bonds are associated with emerging market issuers, they are among the safest bonds in that category. Need a Tutor?

Tuesday, September 4, 2012


The trouble with being in business as a sole proprietor is that you remain personally liable for the debts and lawsuits against the business. You have not created a separate legal entity—you and the business are one and the same. If the sole proprietorship called Mary's Muffins accidentally sells ten dozen tainted blueberry muffins that send swarms of sick people to the ER, Mary is in a whole lot of trouble. All the lawsuits will be filed against her personally, and the creditors who used to spot her flour, oil, sugar, etc., are going to come after Mary personally for any unpaid bills. Also, some students seem to think the term "sole proprietor" means "no employees." Not at all. It just means that when it comes to the ownership of the business, there is only one individual human being, with no actual separation between him and his business. Believe it or not, some broker-dealers and many investment advisers are owned as sole proprietorships.  To protect assets, there is always insurance.  But, to be a sole proprietor without sufficient liability insurance for damages one might cause; that is risky business. I often marvel that as a high school and college student I owned a small, not-quite-lucrative carpet cleaning business. At one point, I called it Dunwell Cleaning, because that sounds like a business, doesn't it? It was really just an assumed name, and I had to publish a text ad in the local newspaper that probably no one in the greater Champaign-Urbana area ever read announcing that Robert Walker is now doing-business-as (DBA) Dunwell Cleaning. I received an assumed name certificate from the county so that I could open a bank account in my name "DBA Dunwell Cleaning" and customers could write checks to a business as opposed to some 22-year-old kid named Bob. The liability I took on entering people's homes, businesses, and sorority houses was actually huge in retrospect--I could have ruined thousands of dollars of carpeting, or maybe somebody trips over the extension cord I'm using on the second floor and gets seriously injured, or maybe some hysterical customer calls at 2 AM screaming that her children have been rushed to the ER due to an allergic reaction to the spot remover I sprayed all over the poor kids' bedrooms. Luckily, I was just smart enough to buy some liability insurance that would have paid out on some of those claims, although--now that I think of it--I had no assets at the time, so what the heck was I protecting? Anyway, if one does have assets (nice houses, cars, stocks, bonds, and annuities, etc.) one needs to think long and hard about doing business as a sole proprietor. Without the right insurance coverage, sole proprietors can easily end up losing everything they own over a lawsuit or bankruptcy filing. NEED HELP WITH YOUR EXAM?

Thursday, August 2, 2012

Real estate is not a security? But an interest in a REIT is?

The title to this post is the title of an email I received from a Series 65 candidate who--like most people--is still struggling to get over the hurdle known as the Series 65 Exam. What stands out to me is this--her question actually explains THE point when trying to determine if an investment is actually a "security." But before I go there, let's first ask the more important question: why does the test ask me if something is or is not a security? Because of two things: the anti-fraud statutes, registration requirements. If the investment is not a security, the Uniform Securities Act has no authority over it, period. For example, you cannot commit securities fraud when offering/selling a fixed annuity--it's not a security. But, a mission investment fund security offered by a religious organization--Lutheran, Catholic, etc.--does meet the definition of a security. It is, therefore, subject to anti-fraud rules, and if investors are sold securities based on insufficient or erroneous offering documents, that is securities fraud. The security is exempt from the registration requirements of the Uniform Securities Act, but all SECURITIES are subject to the Uniform SECURITIES Act. And, the Uniform SECURITIES Act doesn't cover fixed annuities any more than it covers baseball cards.
Or, does it cover baseball cards?
I don't know--tell me more. If we're talking about some guy with a shoe box full of rare and valuable baseball cards, we're definitely talking about somebody with something of value--an investment of money that has likely gone up in value over time. But baseball cards are tangible items, things. Securities are always intangible. This piece of paper represents a debt obligation of a corporation; this piece of paper represents an ownership stake in a C-corporation trading on the NYSE, etc. So, a baseball card collection is an investment of money in collectible items--not a security. We could use baseball cards, on the other hand, to create an investment of money that would meet the definition of a "security."  Using the criteria from the Howey Decision, what would we call a situation in which 27 investors put $25,000 into an enterprise that uses that infusion of capital to travel the country going to baseball card swaps. Each investor receives a 1.5% ownership stake of any net profits/dividends. We don't call it "stock" or anything like that? Well, no one cares what it's called.  The question is--how does it function? It functions as an investment of money in a common enterprise where the investors profit solely through the efforts of others. It's an investment contract, which is a security.
Similarly, if you purchase a commercial building--which I so do not recommend--you have invested in real estate. This is not a security. However, if you put together a bigger real estate program funded by investors who put in money in exchange for an equity/ownership stake, now you have created a security. Chances are, you have created a REIT (real estate investment trust), in which investors will receive a share of net income, assuming there is any. So, the customer's email was perfectly titled--real estate is just real estate. If you sell ownership interests in a real estate program--now you're talking about a security. Need Help with Series 65/66?

Thursday, July 19, 2012

What the Heck Is a Willful Violation?

Let's see how the Uniform Securities Act explains the meaning of the term "willful violation." The notes to the USA state: As the federal courts and the SEC have construed the term “willfully” in § 15(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78o(b): all that is required is proof that the person acted intentionally in the sense that he was aware of what he was doing. Proof of evil motive or intent to violate the law, or knowledge that the law was being violated, is not required. So, don't think for a moment that a willful violation occurs because the person clearly knew he was violating the law or maybe even the specific statute.  No, no, no. The so-called "investment adviser" was not declared mentally incompetent at the time she created a little-pretend family of mutual funds. So . . . she obviously knew the "mutual fund investments" she was "selling" to people were bogus. Willful violation. Of course, the New Jersey Bureau of Securities took away her license as an RIA. . . more importantly, the attorney general's office got a plea bargain out of her in a criminal proceeding leading to PRISON time. For more on this case, see
But, that's just ONE example of a "willful violation." A "willful violation" could involve a financial planner getting her license revoked by the state but continuing to offer and provide financial planning services, anyway. That could--believe it or not--lead to criminal penalties. But that would be highly unusual.
The Uniform Securities Act  makes it clear that one can defraud an investor without any intent to defraud. Through negligence, incompetence, or breach of fiduciary duty, you can be sued and/or lose your license, but it's not a crime to buy somebody an inappropriate security. It's just often a career-ender. Check out what the Uniform Securities Act has to say at the very beginning: Part I Fraudulent and Other Prohibited Practices
Sec. 101. [SALES AND PURCHASES.] It is unlawful for any person, in connection with the offer, sale or purchase of any security, directly or indirectly
(1) to employ any device, scheme, or artifice to defraud,
(2) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or
(3) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
OKAY, notice the last two lines under (3)??That means that a sloppy/incompetent/negligent person can violate the securities laws of the state by "engaging in a course of business which does or would operate as a fraud." How? Because the dude is so incompetent that all investors likely get bad information or no information. He's not going to jail; he's just going into a new industry at his earliest convenience. For example, a few years ago a new registered representative in Illinois had an elderly client who wanted "government bonds for safety and income." Dude bought her government bonds . . . issued by Honduras and Nicaragua. Was the investor defrauded? Yes. Did the dude go to jail? No. And since he didn't mean to hurt anyone, he's still a registered representative, right? Wrong. He acted in a way that operated as a fraud on the investor. He's not a criminal; he's just incompetent. And now, he's in a new line of work, hopefully one more suited to his particular skill set.

Friday, July 13, 2012

Cash Flow

A company reports its net income after tax (net profit) on the income statement. That net income is reduced if the company is subtracting large amounts for depreciation/amortization. If a company bought a printing press for $1 million cash a while ago, they might be subtracting $100,000 a year until they've written down the cost to zero, in order to spread the cost over the useful life of the equipment. But those subtractions now are not cash--they are a reality check. Since depreciation/amortization is a non-cash subtraction on the income statement, analysts often add back that subtraction to the net income in order to estimate how much cash the company is generating.
In the 10K, the company shows its balance sheet and income statement, and also a statement of cash flows. There are three ways a company can use or generate cash each year: operations, investing, financing. A company can generate or use up cash operating its business, but also by investing in equipment (or selling it off) or issuing securities (or buying them back). So, if the company's cash position increases, analysts would note perhaps that it's simply due to a recent offer of stock or convertible debentures (financing). If the cash position drops this year, maybe it's only because the company wisely invested cash into better equipment (investing). For extra credit "google" a public company's 10K and read thru the consolidated financial statement and the notes to it. It could REALLY help you on a few test questions. NEED HELP with your exam?

Thursday, June 21, 2012

Self-Directed IRAs and 401Ks

Some folks might pretend they know the ins and outs of all available retirement plans, but that is not likely. For example, few people know that within an IRA account, an individual can actually invest in real estate, private placements, notes, and other investment options far outside the typical CDs and mutual funds. Self-directed IRAs allow individuals to invest in the typical securities investments that typical IRAs do but also expand into real estate, or possibly even providing start-up capital to a speculative company. Only certain companies can act as the administrator for the self-directed IRA account, but you can certainly find a few if you google the term "self-directed ira" or "self-directed 401K." I guess if I were impressed with my returns on real estate thus far, I might consider switching my Traditional or my Roth IRA to a self-directed account. But, since I prefer to buy REITS to financing and managing my own properties, I will continue to let my current broker-dealer/custodian hold the assets. But, who knows, some investors may want to explore the opportunity of investing in, for example, real estate or start-up companies. The test might even bring up the expanded investment options allowed in "self-directed IRAs" or "self-directed 401Ks."more help CLICK here

Sunday, May 20, 2012

How to think about SECURITIES

When confronting tough questions concerning securities, try to process the information like this:

1. Is the INVESTMENT of money a SECURITY? 
     If so, it is subject to the state's anti-fraud authority.
2. Is the security exempt? 
3. Is the transaction exempt? 
      If no on both questions--somebody forgot to get the thing registered!

Okay, let's apply that little list. An indexed annuity is outside the scope of the SECURITIES act, so it's not even subject to the Uniform Securities Act's anti-fraud statutes. On the other hand, a church bond is merely an exempt SECURITY. That means it escapes registration fees and paperwork but is still subject to the Uniform Securities Act's anti-fraud statutes. Finally, a private placement involves a NON-exempt security being offered/sold in a special way. The people connected to the offer, sale, or purchase of this security are all subject to the state's anti-fraud authority.

Now you see why the Howey Decision was so important--if the respondent's lawyers can convince the hearing officer or judge that the investment was not a security, the client walks. Right? If it's not a security . . . it's not a security. If it IS a security it IS subject to anti-fraud rules AND will either need to be registered or exempted from registration.

more help

Friday, May 18, 2012

JP Morgan's $2 billion boner

So, obviously, we don't wanna tick off employees of JP Morgan, especially as no one reading this blog had a darned thing to do with the loss of $2 billion from bad derivatives trading. But, there is a tie-in to a couple of testable points, and all public companies are fair game, so here goes. When/if you see the term "forward" on your exam, you'll need to remember that these derivatives are private, unregulated arrangements between two parties. Because forwards--unlike options and futures--do not trade on regulated exchanges, with settlement dates and margin requirements enforced, we occasionally end up hearing about some tsunami-like effect when one side finally has to admit to themselves, their trading partners, and the regulators--uhhhhhhhhhh, we really screwed up here--wtf? Even though the housing crash was inherently linked to the speculation in mortgage-based derivatives, here we are four years later with the same stuff still happening. Why? Way beyond the scope of the exam and this blog. I just want you to associate the term "forwards" with "unregulated derivatives" and remember that they are private arrangements between two parties.
And, man, do some of these contracts get creative. You're afraid that a corporation you lent $300 million to might default? Structure a derivative in which the other side agrees to pay you X amount if that happens. You find yourself sitting on a portfolio of $5 billion worth of "sovereign debt" issued by OPEC nations and start to worry they maybe cannot or will not pay? Structure a derivative that works like an insurance contract that pays out if that disaster strikes. Or, just make wild speculative bets that X, Y, or Z will occur across the globe, whether it's a bond default, a weather-based event, or probably a hundred things my limited imagination has never considered. Unfortunately, not everyone fully understands what they're getting into, and they frequently forget that the things in life that will "never happen" always do eventually. Only worse.
In any case, I'm not worried about the survival of JP Morgan, but I definitely understand the concerns of the regulators trying to avoid another credit crunch or series of big bank failures. The "banks" these days get to take FDIC insured deposits and then use those funds to make esoteric bets using unregulated derivatives few seem to understand. Obviously, it doesn't work out so well sometimes. Who should pay the price? Shareholders, in my opinion. And then the you-know-what needs to roll UPhill--the shareholders need to organize, vote down the executive compensation packages and even remove the members of the board of directors who don't seem to have any more ability to avoid a $2 billion loss than any random person swearing at an ATM at any Chase(TM) location this afternoon.  More Help Click HERE

Monday, April 16, 2012

Mutual Fund Prospectus, SAI, Shareholder Reports

To REALLY understand mutual funds--and investment vehicles in general--download a mutual fund prospectus, and an SAI, and a shareholder report. If you want the scaled-down, bare-bones disclosure document, download the prospectus or the even slimmer summary prospectus. You'll find the risks and objectives and policies of the fund, the fees and expenses, the taxation issues, etc. But if you want to see precisely what's in the portfolio, download the statement of additional information or SAI. For example, when I look at the prospectus for the American Balanced Fund, I see that: "The fund invests in a broad range of securities, including common stocks and investment-grade bonds (rated Baa3 or better or BBB- or better by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser or unrated but determined to be of equivalent quality). The fund also invests in securities issued and guaranteed by the U.S. government and by federal agencies and instrumentalities. In addition, the fund may invest a portion of its   assets in common stocks, most of which have a history of paying dividends, bonds and other securities of issuers domiciled outside the United States." Okay, that's a good general statement that could attract or repel from an investment in this conservative mutual fund. But if I'm willing to download the statement of additional information/SAI, I can get more detail on the portfolio. For example, I see that within the 69.73% of the portfolio devoted to common stock, there are some 45,386,600 shares of Wells Fargo worth at the time $1.25 billion. The portfolio holds 16 stocks in the "financials" sector, which represents both 10.8% of the fund's industry allocation and approximately $5.3 billion of market value.  By the way, I notice that this mutual fund holds large positions in at least four other companies that issue and/or manage mutual funds. Hey--why not--it's a great business? So, the SAI gives a much more detailed look at the mutual fund portfolio than the prospectus or summary prospectus.  If I want to know that and also how much money the fund pays in expenses to all the various service providers, I need to download the shareholder report--either semi-annual or annual. In this report, I discover that the following parties were paid the following amounts:
  Investment advisory services   121,350,000
  Distribution services  182,738,000
  Transfer agent services  42,807,000
  Administrative services   30,064,000
  Reports to shareholders  2,393,000
  Registration statement and prospectus  762,000
  Trustees’ compensation  458,000
  Auditing and legal   133,000
  Custodian   278,000
  Other   2,214,000
TOTAL EXPENSES $383,197,000

So, the fund's income statement shows that the portfolio earned $1,306,571,000 in dividends and interest, and after deducting $383,197,000 for expenses, the net investment income was $923,374,000. Notice that the adviser earned about $121 million managing the portfolio; the distributor earned about $182 million marketing the shares and providing other services. Heck, just generating the semi-annual and annual reports themselves cost about $2.4 million a year! In any case, I find this stuff interesting. It's painful to dig in at first, but the rewards are pretty high. I mean, if you understand mutual funds to this level, how hard are the test questions really going to be?

Friday, March 30, 2012

RIMM, Research In Motion, BlackBerry

I've been tutoring series 65/66 exam candidates a LOT lately, and one area most seem to struggle with is fundamental analysis. Not sure why so many people are intimidated by the income statement, balance sheet, or statement of cash flows. If you're a business owner, pull up Quickbooks and print your financial statments--how did you do last quarter or last year in terms of sales and profits? That's your income statement. What's your current financial condition in terms of assets and liabilities? That's your balance sheet. If you took a lot of depreciation expenses on your income statement, you might want to see how much cash you generated on the statement of cash flows; or, you can just take your net income after tax on the income statement and add back the depreciation you took on equipment, real estate or other fixed asset.
What's any of this got to do with RIMM/Research In Motion/BlackBerry? Take a look at this scary snippet from a recent headline on the company: "Following quarter after quarter of slashed financial outlooks and missed targets, the company made the ominous choice to discontinue making future predictions about its BlackBerry sales or profit." Huh? What IS a share of common stock? As your exam might say, it's merely a claim on any earnings/profits/dividends the company might have. Well, at RIM right now, there's none of that going on. Last year they made a profit of $934 million; this year they LOST $125 million. So, a share of RIMM right now is a share of a profit that comes in just south of ZERO. Will the company turn around? Here's another snippet: The new CEO said the next several quarters will be difficult ones as the company transitions to a new, bet-the-house platform called BlackBerry 10. That is still on track to become available at the end of the year -- far later than RIM initally planned." Oh, great--so it all comes down to this new platform, and that platform is already suffering release delays. Even if the thing does work out, there will almost certainly be negative news items pushing this stock down indefinitely. Then again, maybe you're a value investor, and you see hidden assets on the balance sheet. Maybe you just feel that sales will improve again, that this "loss" is really due to a one-time event, and as the news drags the stock price down, you load up your shopping cart and just wait for the inevitable turnaround that inconveniently hasn't taken place yet.
Or, you care NOTHING about the COMPANY called Research In Motion because you use technical analysis. Regardless of what the company does, you just trade the stock RIMM based on its price patterns, volume levels, 200-day moving average, what have you. Whatever the case, try to use the financial news to help clarify what you're studying. If you go into the testing center with no real-world understanding whatsoever .. . well, try not to do that. The passing score on the Series 65 exam is 72%; the passing score on the Series 66 exam is 75%. Overstudy?

Thursday, March 29, 2012

How do I set up my own RIA?

Most people taking the Series 65 exam are going to work for an investment adviser, but some are actually setting up their own RIA/registered investment advisory firm. Either way, first understand that passing the Series 65 exam is just a pre-requisite. If you pass the Series 65, you can then apply for a license from your state. IARs (investment adviser reps) register with a Form U4; investment advisers register via Form ADV. Criminal and regulatory disclosure is provided on both forms, and this is where it all goes wrong for a handful of people, as you might have seen from other blog posts. For example, some people pass the exam with flying colors but then have to answer "yes" they were convicted of a felony, or convicted of a misdemeanor involving money or dishonesty. For some, this is a game-over.
Of course, most of you have no criminal or regulatory issues, so you can go ahead and take the Series 65 exam all on your own, knowing that the test is really the only issue. Use a U10, pay your money, buy your materials and study, then schedule your exam and pass it.
That would be Step 1.
If setting up your own RIA, you should also be focusing on all of that, and many people choose to use compliance consultants to do so. RIA Registrar includes our materials in their package to folks setting up RIAs. Google them if interested. Our exam materials, btw, are at

Monday, January 9, 2012

Series 65 or Series 66 Tutoring?

Looking for a little help passing the Series 65 or Series 66 exam?
We have a solid track record of helping people pass their exams, recently and over the previous 7 years.
We use GoToMeeting to provide you with an individualized study platform in which you can move at your own pace and get the help YOU need.
For more information, click the title of this post.